Sales Tax Totals Rising

City manager says projected revenue exceeds expectation

April 26, 2014

WHEELING - Little by little, revenue from Wheeling's new municipal sales tax appears to be improving.

Over its first five months, from October through February, the new tax has generated $793,000, an average of $158,600 per month. At that pace, the city would collect about $1.9 million over a full year, exceeding City Manager Robert Herron's projection of $1.6 million for the 2014-15 fiscal year, which begins July 1.

Figures for March are not yet known because payments from that month weren't due to the state Tax Department until last week.

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HERRON

The five-month total includes $196,000 in revenue for December - a figure that may be artificially high due to the Christmas shopping season - but the two months before and after December tell different stories. For October and November, the city collected just $278,000, while it pulled in $319,000 for January and February.

Officials blamed sluggish initial collections on a lack of awareness on the part of some businesses, some of which were still charging only 6 percent in state sales tax several weeks after the 0.5-percent municipal tax went into effect, a situation that seems to have improved over time.

"I think there's more widespread knowledge of the ordinance that requires the payment," Herron said.

Although Herron finds the recent numbers encouraging, he said it's still early.

"I have an idea where it's going to settle in. ... We need another couple of months to make sure," Herron said.

What happens during those couple of months could be important in multiple ways.

For one, the city is waiting for a reliable trend to emerge before settling on the scope of an improvement project at WesBanco Arena, to which officials have pledged 50 percent of the revenue from the new sales tax. Priorities include new seats, shoring up the leaky lobby area and upgrades to the scoreboard, restrooms and concession stands.

Whether sales tax revenue continues improving also will have an impact on some significant recommendations for the future that Herron is planning to make to City Council. After delaying business and occupation tax breaks that had been set to go into effect April 1, council directed Herron to perform an in-depth review of Wheeling's operations and tax structure and come back to them in June with suggestions on how to reduce the size of government and provide more comprehensive B&O relief that is fair to all businesses.

Herron said his review is ongoing, but declined to comment on its progress.